FIN 300 Exam 1 Study Guide Tsarsis questions
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with verified answers
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Role |of |Financial |Manager |- |CORRECT |ANSWER-Make |decisions |on |behalf |of |the |firm's |investors
For |good |decisions, |the |benefits |exceed |the |costs
Stakeholder |Theory |- |CORRECT |ANSWER-A |theory |that |holds |that |social |responsibility |is |paying |
attention |to |the |interest |of |every |affected |stakeholder |in |every |aspect |of |a |firm's |operation
Capital |Budgeting |- |CORRECT |ANSWER-the |process |of |analyzing |the |needs |of |the |business |and |
selecting |the |assets |that |will |maximize |its |value
Financing |decision/Capital |structure |decision |- |CORRECT |ANSWER-How |will |the |company |obtain |
investment |capital |to |obtain |its |productive |assets?
Financing |Decision |- |CORRECT |ANSWER-How |a |firm |builds |the |liability |and |equity |side |of |the |balance |
sheet |to |finance |its |investments. |Whether |the |firm |chooses |to |finance |(pay) |for |its |assets |through |
using |debt, |or |issuing |equity.
equity |- |CORRECT |ANSWER-ownership |of |assets |that |may |have |debts |or |other |liabilities |attached |to |
them
Goal |of |the |firm |- |CORRECT |ANSWER-maximize |profit
Agency |Conflict |- |CORRECT |ANSWER-the |possibility |of |conflict |of |interest |between |the |stockholders |
and |management |of |a |firm
Agency |Relationship |- |CORRECT |ANSWER-relationship |between |stockholders |and |management
Alignment |of |goals |of |shareholders |to |managers |- |CORRECT |ANSWER-
, Sarbanes-Oxley |Act |(SOX) |- |CORRECT |ANSWER-Regulations |passed |by |Congress |to |reduce |unethical |
corporate |behavior.
FED |- |CORRECT |ANSWER-the |Federal |Reserve |System |(the |nation's |central |banking |organization)
FED |goals |- |CORRECT |ANSWER-1) |Maximum |Employment
2) |Price |Stability |
3) |Financial |Market |Stability
FED |tools |- |CORRECT |ANSWER-open |market |operations, |discount |rate, |reserve |requirement
open |market |operations |- |CORRECT |ANSWER-the |buying |and |selling |of |government |securities |to |
change |the |supply |of |money
discount |rate |- |CORRECT |ANSWER-rate |the |Federal |Reserve |charges |for |loans |to |commercial |banks
Reserve |Requirements |(RR) |- |CORRECT |ANSWER-- |affect |how |much |money |banks |can |create |by |
making |loans
- |the |fraction |of |deposits |banks |must |hold |in |the |vault |or |on |deposit |at |the |FED
Financial |Markets |- |CORRECT |ANSWER-markets |where |financial |securities, |such |as |stocks |and |bonds, |
are |bought |and |sold
Primary |markets |versus |secondary |markets |- |CORRECT |ANSWER--Primary |markets |are |the |markets |in |
which |corporations |raise |new |capital. |The |corporation |selling |a |newly |created |stock |receives |the |
proceeds |from |the |sale |in |a |primary |market |transaction |(Business/Gov |to |Investor) |
-Secondary |markets |are |markets |in |which |existing, |previously |issued |securities |are |traded |among |
investors. |(investor |to |investor)
| | | || | || | |
with verified answers
| |
Role |of |Financial |Manager |- |CORRECT |ANSWER-Make |decisions |on |behalf |of |the |firm's |investors
For |good |decisions, |the |benefits |exceed |the |costs
Stakeholder |Theory |- |CORRECT |ANSWER-A |theory |that |holds |that |social |responsibility |is |paying |
attention |to |the |interest |of |every |affected |stakeholder |in |every |aspect |of |a |firm's |operation
Capital |Budgeting |- |CORRECT |ANSWER-the |process |of |analyzing |the |needs |of |the |business |and |
selecting |the |assets |that |will |maximize |its |value
Financing |decision/Capital |structure |decision |- |CORRECT |ANSWER-How |will |the |company |obtain |
investment |capital |to |obtain |its |productive |assets?
Financing |Decision |- |CORRECT |ANSWER-How |a |firm |builds |the |liability |and |equity |side |of |the |balance |
sheet |to |finance |its |investments. |Whether |the |firm |chooses |to |finance |(pay) |for |its |assets |through |
using |debt, |or |issuing |equity.
equity |- |CORRECT |ANSWER-ownership |of |assets |that |may |have |debts |or |other |liabilities |attached |to |
them
Goal |of |the |firm |- |CORRECT |ANSWER-maximize |profit
Agency |Conflict |- |CORRECT |ANSWER-the |possibility |of |conflict |of |interest |between |the |stockholders |
and |management |of |a |firm
Agency |Relationship |- |CORRECT |ANSWER-relationship |between |stockholders |and |management
Alignment |of |goals |of |shareholders |to |managers |- |CORRECT |ANSWER-
, Sarbanes-Oxley |Act |(SOX) |- |CORRECT |ANSWER-Regulations |passed |by |Congress |to |reduce |unethical |
corporate |behavior.
FED |- |CORRECT |ANSWER-the |Federal |Reserve |System |(the |nation's |central |banking |organization)
FED |goals |- |CORRECT |ANSWER-1) |Maximum |Employment
2) |Price |Stability |
3) |Financial |Market |Stability
FED |tools |- |CORRECT |ANSWER-open |market |operations, |discount |rate, |reserve |requirement
open |market |operations |- |CORRECT |ANSWER-the |buying |and |selling |of |government |securities |to |
change |the |supply |of |money
discount |rate |- |CORRECT |ANSWER-rate |the |Federal |Reserve |charges |for |loans |to |commercial |banks
Reserve |Requirements |(RR) |- |CORRECT |ANSWER-- |affect |how |much |money |banks |can |create |by |
making |loans
- |the |fraction |of |deposits |banks |must |hold |in |the |vault |or |on |deposit |at |the |FED
Financial |Markets |- |CORRECT |ANSWER-markets |where |financial |securities, |such |as |stocks |and |bonds, |
are |bought |and |sold
Primary |markets |versus |secondary |markets |- |CORRECT |ANSWER--Primary |markets |are |the |markets |in |
which |corporations |raise |new |capital. |The |corporation |selling |a |newly |created |stock |receives |the |
proceeds |from |the |sale |in |a |primary |market |transaction |(Business/Gov |to |Investor) |
-Secondary |markets |are |markets |in |which |existing, |previously |issued |securities |are |traded |among |
investors. |(investor |to |investor)
